Analysis by an industry leader has examined how the type of borrower affects the likelihood of a mortgage default

AMP’s loan book continued to grow during the last financial year, despite an overall decrease in earnings.

The bank’s total loan book, of which just over half comes from the broker channel, increased 7.6% in FY13, up to $13.3bn from the previous financial year’s $938m.

Meanwhile, the bank’s operating earnings decreased by $21m (34%) to $83m in 2013 from $62m in 2012, “driven mainly by higher net interest margins and mortgage book growth”.

An AMP bank spokesperson said the broker market is a “significant” channel for the bank, and says the bank will continue to invest in the broker sector.

“The Bank has a number of priorities over the coming year, including investment which will improve the broker experience with AMP Bank, such as upgrading our technology and the online application process, which will improve turnaround times,” said the spokesperson.

Total residential mortgage growth for the bank was 7.1% throughout the financial year. Owner occupied loans made up 68% of the mortgage portfolio at year end while investment property loans were 32%.

“There was growth in mortgage demand in the year across the AMP planner channels and also a stronger take-up of practice finance loans,” AMP chief executive Craig Meller told shareholders.

“Practice finance loans have grown by 23% in the year to $466m, reflecting the bank’s commitment to supporting the financial planning businesses of the AMP group.”

Mortgages in arrears also fell to 0.37%, down from 0.44% in December 2012.

Meller said that while AMP has delivered strong underlying earnings growth across the majority of its business units, the result has clearly been impacted by the ongoing challenges facing the life insurance sector.

“We made considerable progress against our growth strategy in 2013. The pathway to a more customer-centric organisation is clear and work is underway on improving multi-channel access, diversifying advice models and better using data to drive customer offers.”